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Brighton Collectibles, Inc. v. Marc Chantal USA

August 17, 2009

BRIGHTON COLLECTIBLES, INC., A CALIFORNIA CORPORATION, PLAINTIFF,
v.
MARC CHANTAL USA, INC., A TEXAS CORPORATION; MARC CHANTAL MOTION FOR ATTORNEY AMERICA, INC., A TEXAS CORPORATION; FEES AND DOES 1 THROUGH 10, INCLUSIVE, DEFENDANT.



The opinion of the court was delivered by: Marilyn L. Huff, District Judge United States District Court

ORDER: MOTION FOR ATTORNEY FEES (1) DENYING PLAINTIFF'S (2) DENYING DEFENDANTS'

On May 26, 2009, Plaintiff filed a motion for attorney fees. (Doc. No. 365.) On June 15, 2009, Defendant filed its opposition to Plaintiff's motion for attorney fees. (Doc. No. 373.) On June 22, 2009, Plaintiff filed a reply in support of its motion. (Doc. No. 379.)

On May 26, 2009, Defendants filed a motion for attorney fees. (Doc. No. 368.) On June 15, Plaintiff filed an opposition to Defendants' motion for attorney fees. (Doc. No. 374.) On June 22, 2009, Defendants filed their reply in support of its motion. (Doc. No. 378.)

On July 24, 2009, the Court heard oral argument on the parties' motions for attorney fees. Peter Ross and Keith Wesley appeared for the Plaintiff. Matthew Murphey and Kimberly Howatt appeared for the Defendants. For the following reasons, the Court denies Plaintiff's motion for attorney fees and denies Defendants' motion for attorney fees.

Background

Plaintiff Brighton, a designer, manufacturer, and retailer of women's fashion accessories, brought suit against Defendant Marc Chantal, a competitor. Plaintiff's Complaint alleged claims for trademark infringement, trade dress infringement, false designation of origin, common law unfair competition, and statutory unfair competition. (Doc. No. 1.) On the first day of trial, Plaintiff dismissed its claim for infringement of its "Brighton" word mark and the Court granted the parties' stipulated motion to dismiss claims against party Marc Chantal USA, Inc. (Doc. No. 303; Tr. I-103-04.)

On April 17, 2009, the jury returned a special verdict finding that Brighton had proved by a preponderance of the evidence that Defendant had willfully engaged in trade dress infringement and false designation of origin and engaged in unfair competition with malice, fraud, or oppression. (Doc. No. 337.) The jury found that Brighton had not proved by a preponderance of the evidence its claim for infringement of the Brighton dangling heart trademark. (Id.) The jury awarded Plaintiff $7,232,829, which it found to be the total amount of Marc Chantal's profits resulting from the trade dress infringement, false designation of origin, and unfair competition in addition to $3,616,415 in punitive damages on the unfair competition claim. (Id.; Doc. No. 338.) On Plaintiff's motion, and after allowing briefing and oral argument, the Court granted Plaintiff a permanent injunction prohibiting Marc Chantal from engaging in future infringement. (Doc. Nos. 353, 358.) The Court entered Judgment on May 11, 2009. (Doc. No. 358.)

Both parties now move for attorney fees under the Lanham Act, each claiming to be the prevailing party on some or all of the claims at issue. Brighton claims to be the prevailing party under the Lanham Act with respect to its claims for trade dress infringement and false designation of origin and seeks $1,050,490 in fees. (Pl.'s Mot. at 1.) Defendant contends it is the prevailing party as to all claims against Marc Chantal USA as well as Plaintiff's claims for trademark infringement involving the Bristol word mark and the dangling heart trademark. Defendant seeks $792,999 in fees. (Def.'s Mot. at 1.)

Discussion

I. Motion for Attorney Fees -- Legal Standard

Under Federal Rule of Civil Procedure 54, a party may move for attorney fees, unless the substantive law requires those fees to be proved at trial as an element of damages. Fed. R. Civ. P. 54(d)(2)(A). In this case, both parties rely on the Lanham Act to support their requests for attorney fees. (Pl.'s Mot. at 6; Def.'s Mot. at 9.) The Lanham Act expressly provides that "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party."

15 U.S.C. §1117(a). A party is the prevailing party if it "succeeds on any significant issue in the litigation by achieving some of the relief sought." Transgo, Inc. v. Ajac Transmission Parts Corp., 768 F.2d 1001, 1027 (9th Cir. 1985) (in the copyright context). Generally, under fee-shifting statutes, a party prevails when it achieves a "material alteration of the legal relationship of the parties" through court action. Buckhannon Bd. & Care Home, Inc. v. West Virginia Dept. of Health & Human Resources, 532 U.S. 598, 604 (2001). But the Lanham Act authorizes attorney fees "only in exceptional cases." Classic Media, Inc. v. Mewborn, 532 F.3d 978, 990 (9th Cir. 2008).

The Act "nowhere defines what makes a case 'exceptional.'" Stephen W. Boney, Inc. v. Boney Svcs., Inc., 127 F.3d 821, 825 (9th Cir. 1997). The Ninth Circuit explains that "a determination that a trademark case is exceptional is a question of law for the district court, not the jury." Watec Co., Ltd. v. Liu, 403 F.3d 645, 656 (9th Cir. 2005). Therefore, a jury's determination of willful, fraudulent, or malicious infringement is not binding on the Court. "A case is exceptional where the district court finds that the defendant acted maliciously, fraudulently, deliberately, or willfully." Id. Once a court concludes that a case is exceptional, it may award attorney fees in its discretion. Lindy Pen Co., Inc. v. Bic ...


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